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The Apprenticeship Levy explained

How the apprenticeship levy will work for your business and how you can get prepared - we discuss the latest news

9 February 2017

The apprenticeship levy, it seems, through conversations with employers and other training providers, is still causing considerable confusion. We are often being asked questions about apprenticeships in general and what the reform means for employers across the UK. So here, we’ll try to explain a bit more and tell you about the latest updates.

The Government has a target of 3 million apprenticeships available by the start of 2020. As a result, apprenticeships are in the process of undergoing a significant transformation - known as the apprenticeship reforms.

Employer-led system

The rationale behind the reforms is to create an employer-led system which aims to improve apprenticeship quality, simplify apprenticeship frameworks and create apprenticeships which respond to employer needs.

Trailblazers

The Trailblazer system has been set up to create this employer-led system and give employers greater control over frameworks. Trailblazer groups are made up of groups of employers who are able to design detailed apprenticeship standards within their sectors.

The rationale behind the reforms is to create an employer-led system which aims to improve apprenticeship quality.

What is the apprenticeship levy?

To fund apprenticeships going forward, the apprenticeship levy was brought into effect from April 2017.

The apprenticeship levy is a charge for employers who have annual salary bills in excess of £3 million, so less than 2% of UK employers will pay it.

This charge will be calculated at 0.5% of an employer’s payroll and the money raised will be ring-fenced to pay for apprenticeships.

Technical consultation on Apprenticeship Levy On 14th December, the HMRC launched a technical consultation on draft apprenticeship levy regulations which include the calculation, reporting, payment and recovery of the levy. Central YMCA responded to the consultation and await further announcements.

Institute for Apprenticeships announces Board Members The Government has announced eight board members for the Institute for Apprenticeships. Board members include business, LEP and college representatives but fall short of appointing a board member to represent independent training providers. YMCA Training has written to Peter Lauener, CEO of the IfA, to highlight the good work the charity and independent sector do and have called for better representation.

Digital Apprenticeship Service (DAS) to go live in February The new Digital Apprenticeship service (DAS), which lets levy-payers access their accounts and make payments online, has been cleared for use according to the Department for Education.

It is believed that levy-payers will be able to use DAS to choose the types of apprenticeships they want to run, the number of apprentices they take on, and appropriate training providers.

Concerns raised about the Levy

Following a visit to YMCA Training Doncaster, Dame Rosie Winterton MP attended a session in the Commons to raise concerns surrounding the apprenticeship reform programme.

Rosie said: “It is really important that we ensure that training providers, like YMCA Training, are given the support they need, particularly in terms of investment in skills training, as apprenticeships play a vital role in enhancing life chances of working-class kids and improving social mobility.”

Rosie Winterton MP took concerns discussed during her visit surrounding funding for smaller, non-levy paying employers and the transitional funding arrangements. Ms Winterton has now written to the Secretary of State on YMCA Training’s behalf and is currently awaiting a response.

It is really important that we ensure that training providers, like YMCA Training, are given the support they need, particularly in terms of investment in skills training, as apprenticeships play a vital role in enhancing life chances of working-class kids and improving social mobility.

Dame Rosie Winterton MP

At Central YMCA we can help your business with any questions around apprenticeships, including understanding your levy and sourcing the right candidates. If you would like to know more, you can contact us on 01302 813388 or email ymcatraining.info@ymca.co.uk.